Product Global

Do Your Best Customers Like to Laugh?

Marketing is about what?  Selling your product or service?  Yes, that's true.  I just checked an MBA Marketing Principles 551 textbook and it told me it was true.  Going about that can be so much more of a challenge.  Some marketing experts, Seth Godin is one of them (I found this on his blog), believe that creating a product that people want in the first place will take care of quite a bit in the way of marketing.  Your sales people will thank you for the fact that they won't have to really go out and sell that piece of .... in the box. 

Dare I say, a second goal of marketing a product, is creating a connection with people.  Connecting what?  Connecting people at the company to the customer?  Connecting the people at the company, the customer, and the product all together?  Yea...  in certain industries, that can be critical.  It could be everything.  You may not need this extraordinary bond with everyone, but it may be critical to have it with your best customers.  Given the 80/20 rule, and your best customers are a small 20% or less of the total that contribute 80% of your business...

I see this tag in a store and I chuckle inside.  "Dorks", I remark about the packaging designers at Puma.  But I appreciate it.  In some ways, I admire it.  That's a connection.  As they point out, 96% of the people may not even read the tag.  But it's the 4% who do, that Puma REALLY wants to make and keep a connection with.  If you're product comes from who you are, there may be little ways like this that you can create a connection with people just like you, who will love your product.

Getting to "Bennett": Design and Marketing Personas for Your Product

Developing a product design and marketing messages for:

• 39 of 100 users, ages 35-45, subscribes to 2 electronic device related magazines/newsletters per year, from San Jose, CA, average time on PC = 9.0 hours/day, average TV watching hours/day = 3.0

seems to be more difficult than to develop and market to:

• "Bennett", a 37 year-old, tech geek, from San Jose, California, who spends 9 hours a day on a computer, doesn't have a girlfriend, wears ties with short sleeve dress shirts, and lusts after the IPhone as much as he does Jessica Alba in Dark Angel reruns.

Bennett is a made-up guy.  But he'll probably add a lot of value to a product designer or marketing team when developed from the above spreadsheet.  Far too many companies and entrepreneurs are sinking money into products that will never get off the ground because they did not let the market lead them down the path. 

User-driven design, user-led innovation...development...marketing.  Sure, all of these buzzwords sound great.  Companies often employ a number of techniques into their development processes, but the kernels of valuable information they extract often get tainted, lost in the shuffle, or dropped entirely, as the marketing and engineering processes water down what started the whole thing.

Marketing and design personas are a tool that have become increasingly popular in the last few years, as a way of taking quantitative and qualitative data and fleshing it out into a story or persona of who their customers are and what their customers do.   These can get off track as well, particularly if they're taken too far and the real purpose is lost.  But they still seem to be a useful tool in giving people something emotive and substantive to connect and work with, rather than reams of data.

How do we get from data to..."Bennett"?  The best design and marketing firms in the world get intimate with their potential customers by interviewing them, watching them in action, and staving off assumptions about them until they have a significant amount of research--qualitative and quantitative.  Based on this research, they craft stories about their intended user which become personas. They are experts in the process just as much as the market.  That's why firms like IDEO can work on all kinds of products for different companies in different industries.  They're masters of the process.   

Here are some useful "how-to" resources to help you resuscitate, refresh, and reinvigorate the process of understanding your customer and letting them lead your creation of design and marketing stories and personas:

• IDEO's Five Point Model for Strategy by Design - article in Fast Company magazine

• Getting From Research to Personas: Harnessing the Power of Data - article by Kim Goodwin, Director of Design at Cooper, through MarketingProfs.com

• Do You Know Personas - blog entry at Pragmatic Marketing

• My Shoe Fetish and Why Personas are Invaluable for Marketing - blog entry at Marketingsherpa

• Several useful articles at Cooper's Journal of Design

From Garlic to Cell Phones: A Product Brand is Hard to Get and Essential to Keep

Gilroy, California, the "Garlic Capital of the World".  This town holds an annual garlic festival and delivers the bulk of the garlic eaten in the United States.  But, this garlic isn't grown here in Gilroy anymore.  It's imported from China.    

The overfarming and commoditization of garlic in Gilroy led to a decrease of Gilroy's garlic value in the market by over $70 million.  Chinese garlic sales are up 5000%.  But, while Gilroy's own garlic has gone downhill in dramatic fashion,  garlic farming is still thriving in the United States: just in New York rather than Gilroy.  In New York, it is much more difficult to farm garlic than it is in Gilroy.  Regardless, chefs and garlic connoisseurs (if there is such a thing), believe that the taste of New York garlic is worth paying a premium for--whereas Gilroy garlic, not so much. 

Seth Godin, in his book The Big Moo: Stop Trying to be Perfect, and Start Trying to be Remarkable, explains the above story and the importance of brand.  Godin points out that as soon as Gilroy sold their garlic far and wide, by making it a cheap and boring commodity, they set themselves up for new entrants to come in and create a tough price competition.  To try and fend these new competitors off, they began over-planting. 

Godin explains: "Once you make the standard, you've created a commodity.  Customers will seek out stuff that is the same as your's, but cheaper.  That is why China won."  New York farmers, who run garlic farms that are but a fraction of the size of California mega-farms, are profiting from and ecstatic about the prices at which they sell their garlic.  These farmers are thriving because they've protected their brand and product from becoming average and differentiated from competitor garlic by price only.  Unlike the price of garlic, the brand of garlic is not something that new companies from around the world could come into the market and compete on easily.

Why is this so difficult to do? 

Gordon Graham writes the blog, Broken Bulbs: Innovation.  Graham is currently in Taiwan performing post graduate research on the innovation strategies of Taiwanese firms active in multiple country markets.

In a post entitled "Brand Innovation in Taiwan", Graham writes:

Here in Taiwan many of the high-profile OEM/ODM firms are having a go at developing their own brands as a way out of the price game and its teeny-weeny margins. Though many firms are attracted to the idea of selling their own-branded products, they are finding that moving from OEM/ODM is not as easy as it looks. Many have given up -- retracting back into what they do best: manufacturing complex, mass-produced electronic products in low-wage locations for other firms. Why is the move forward into brands so difficult for these Taiwan-based firms?

Some of the interesting reasons he cites?

- It requires patience. It can take years to get a return on the investment.

- It requires a deep interest in and understanding of country-markets in far away lands.

- It requires an interest in and understanding of other cultures.

- It requires a change in attitude: you can't treat your staff as if they still work in a factory.

- It requires a loyal and committed staff that buy into the brand idea.

- It requires moving directly into the media spotlight -- something many Taiwan-owned businesses prefer not to do.

- A brand requires an authentic story -- not anonymous, behind-the-scenes PR.

- A brand is often linked to a country of origin and this needs to be actively articulated.

As the Taiwanese are finding out, branding is a challenge.  Branding is about creating and spreading ideas, messages, and experiences.  Cooking and eating garlic is pretty standard, unless it's $9 a pound garlic from NY.  That's an experience.  Talking on a cellphone is pretty standard, no matter the phone--unless it's an IPhone.  Branding takes time, resources, and care.  So does manufacturing high-quality products.  But branding is altogether quite different than what's required to manufacture 100,000 units of a cell phone.  Those that make the investment in brand, can sell a bottle of water for up to 1000x the price of tap water.  They can sell garlic up to $9 per pound.  A cell phone for $600.  And maybe...$300 socks someday? 

In branding, the sky is the limit.  In manufacturing, you can hit the floor pretty fast and before you know it, your product is produced as cheaply as possible in a given location and there is no way to accomplish this task more cheaply except by picking up and moving to a new destination.

It's no secret that fantastic profits being made now and in the future are and will be made by companies that are the most adept at managing their brands in the minds of consumers while producing their products cost-effectively in offshore destinations--thus maximizing both ends.  Both activities require competency to be successful, and companies are generally better in one of these activities.  To be successful in the other, they either acquire the talent or outsource the task.

What are you good at?  Should/Can you acquire or outsource the other?      
 

$300 socks to go with your $300 jeans?

$300 socks.  No way.  But I wonder how many people would have shaken their heads 30 years ago at the prospect of $300 jeans.  I still shake my head.  But they're around and people pay for them.  Sure--they offer much better quality material and craftsmanship--but there's an intangible value, created out of thin air, that for some people is real.  The value?  Identity?  A meaningful experience? 

This last issue of Fast Company magazine has served up an interesting article on this, proposing that $300 socks may indeed be inevitable.  Dan and Chip Heath, authors of Made to Stick, have a routine column going in the magazine, and their last article regarding "The Inevitability of $300 Socks", caught my attention.  They're not the first to observe and comment on a growing trend of niche markets, connoisseurship, and customization.  Seth Godin has been heralding the idea for some time that "Small is the New Big".  The number of microbreweries of beer and coffee have risen sharply in the last decade (some of the products that I've been personally paying attention to).  In addition, as the Heaths point out, jeans, to the chagrin of many a teenage parent, have gone from a $30 run-of-the-mill product to $300 a pair.

Their claim?  The concept of luxury is evolving from being less focused on status and more centered around personal pleasure and self-expression.  The article quotes Zain Raj, executive director of the ad agency Euro RSCG, Chicago, who looks back at the 1980's and points out that "You wore $200 pants with an $80 shirt and a $65 tie.  There was a relative order to the world in terms of value.  Today, it's all personal".  Today, the Heath's point out that it's not uncommon to see people wear $300 jeans with $8 T-shirts or people who have a hard time affording their rent, pay for $15 a pound for premium coffee. 

Their point?  "Luxury goods are no longer a sign of status; they're the mark of connoisseurship".  The difference between a product being run-of-the-mill with little profit margin, to a product that can command a premium from a group of connoisseurs, is the ideas behind them. 

This idea goes beyond just the concept of a product for a niche market.  It's more about an idea that lends itself to a consumer's identity and experience.  Think Iphone.  There are the people who paid $500 for an Iphone because they felt the functionality would improve their lives.  There are those that believed that something about holding and using an Iphone in public conveyed specific messages of status to others.  But I think the people I saw camped outside in front of the Apple store the night before the release--found more value packed into the $500 Iphone than either of these two groups.  They got an interactive experience with other people camped on the sidewalk who felt the same way.   

It's similar to when one guy with a Red Sox hat sees another guy across the bar with a Red Sox jersey--and gives the "yeah, man" nod of approval.  Interacting with others who feel the same way is affirming, offering a sense of belonging and identity.  An Iphone sidewalk camper can look at the guy or girl shivering on the pavement next to them and say "Your're a tech geek.  I'm a tech geek.  Let's revel together in our tech geekness".  I'm not knocking it, because I do the same thing in other ways.  I bought the $30 concert t-shirt at a Page & Plant (Jimmy Page and Robert Plant of Led Zeppelin) reunion concert.  I show this to other Led Zeppelin fans and I am instantly elevated to "cool" status.  I connect with a fellow fan.  All the while, I am reminded of how great the concert was.  And the experience of the t-shirt keeps on giving and that's why I paid $30 for it.  If I never went to the concert and saw it on a rack in a store--no way. 

So is it that crazy to think that $300 socks might someday do this for a group of sock connoisseurs? 

One of the great things about this phenomenon, is that it opens the door for so many small businesses and entrepreneurs, who want or are willing to cater to a specific market.  Distribution may be more manageable and building a brand and grabbing mindshare of the customers may be just as easy or easier for an unknown company as it is for an established company.  In fact, it may be much easier for a small company or start-up to do this because they can often achieve a closeness with their customer and maintain an air of authenticity more easily than a larger, more unwieldy company.  Someone did it with pants--watches, chocolate, beer, coffee, t-shirts, bags, and the list goes on.  Socks?  With the right message, communication, and a receptive audience, the possibilities are endless.

Selling Through Big Box Retail? Your Product Should Sell in Three Seconds, From Three Feet. Or You're...

"If you can't get your message across in three seconds to someone standing three feet away in an aisle, your product is not going to work in a store like Walmart." -Tom Welch, Walmart

"What's game changing about my product for it's specific market?" - Chad Bell, Best Buy

The TiE event on Tuesday, What is the Right Channel to Take Consumer Products to Market, was full of thought-provoking questions and remarks like this that are highly relevant for any company or entrepreneur looking to get their consumer products into the right sales channels.  The speakers included:

-Marti Nyman (moderator), Director, Global Innovation Network, Best Buy

-Chad Bell, Merchant Leader for Digital Descriptions, Best Buy
-Tom Welch, Senior Business Manager, Music, Walmart.com
-Margita Labhard, Sr. Program Manager, Bestbuy.com
-Brent Dusing, Cofounder and CEO, Cellfire

I've put together a short summary, of what I think were the top remarks, concepts, and questions that came out of the hour and a half discussion led by the panel.  While these points should be taken into consideration no matter what channel, market, or product you're working with, for those of you who are working in online and big box retail channels--this is coming straight from the source. 

What are the basic questions one should ask themselves about their product and getting into the right sales channel?

• There are a lot of people out there with good ideas, but there are already things out there like it.  We look for products that are game changers; products that affect how a consumer in their target market goes about their daily life.  -Chad Bell

• As a retailer, we need you to know exactly who you are going after.  This is not limited to the user, but also includes the person with the pocketbook.  What is their pain that you're addressing?  Who is going to use it?  And, who is going to pay for it?  -Tom Welch

When is a good time to approach a retailer?

• You want to start early, but your product is going to change over its lifecycle.  Your first sales will be the educational step for your customer.  If you're product requires education, you'll want to choose a channel that allows you the time and means to educate them and influence their buying decision.  Walmart is great at selling things that people understand.  If you can't get your message across in three seconds to someone standing three feet away in a retail aisle, your product will probably not work in a store like Walmart.  -Tom Welch

• Always think from the point-of-view of your customer and know that your channel marketing/sales will always continue to evolve throughout the lifecycle.  -Margita Labhard

What Types of Sales Channels are Available?

• Traditional big box, higher touch...  Higher touch involves those products that require a longer sales cycle and more involvement with a sales person--high technology and high purchase price products like stereo systems, home theaters, etc.  -Chad Bell

• Walmart will take a bet on a riskier product online to see how it does and test how it's going to be communicated.  Everything will be planned out.  Ask "where am I in the process lifecycle and how will this step iterate to the next?  How does the internet channel translate to a phone call and then to the in-store channel?  -Tom Welch

What are typical new company mistakes?

• I know of some horror stories.  I came across a company that was well financed, had what I thought was a cool product, and they spent all of their time on things that were "sexy", like in-store placement, cool inserts, etc.  When you have things like that, it feels like a win.  But, they spent no time educating sales reps.  So the people most critical to selling their product had little to go on, and it hurt.  The lesson?  You have to win over the hearts of the sales people and you need them to fall in love with your product.  Do you offer training programs?  Accommodation programs?   Driving more traffic to our stores is great, but you need to show us how conversion will take place.  -Chad Bell

• Don't miss out on how your customers experience the sales process?  Try to break down the complexities and work backwards to what is the right channel?  Online doesn't provide for an incredibly complex transactional process.  -Margita Labhard

• Trying to grow to quickly can be problematic because you miss out on the learning process and how that translates into future iterations in the cycle.  If you don't learn anything and take the time to get that customer feedback, it can be a big problem that manifests itself later.  As you get farther through the product's lifecycle, you are going to have less time to educate the customer, so you better understand them already. -Tom Welch

How do you choose the right sales channel?

• First, know that this won't be the only time you make this decision.  Ask yourself questions like "do I want visibility from retail shelves so I can gain legitimacy and sell online?  Do I want to get market feedback for future product iterations?  What do I want out of this channel?  How will it fit in with my entire strategy?"  And know that the answers to these questions will change through the cycle.  -Tom Welch

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A Few Good Sources for Ideas; Inspiration; and Lessons on Product Marketing

I recently came across three blogs that I thought were good resources on product marketing.  Marketing is a tricky animal.  One of the biggest challenges in effective marketing is pushing ourselves beyond our own selfish needs and perspectives, to see the needs and perspectives of our customers and align our products with them from the start, get them back on track in the middle, or try again at the end.  It's a process that requires consistent upkeep, continual assessment, and renewal.  Strangely, I think I heard that last line at a friend's wedding somewhere this summer.  Different context, but same idea.

• PragmaticMarketing: Read this post about The New Rules of Marketing.  It's not just another post discussing the impressive marketing job done by Apple with the Iphone.  What I like about this post is that it draws attention to the fact that Apple built a phone that is a product people want to talk about.  Have you noticed that their commercials on TV are simply a hand using the Iphone and showing it's features.  No one yelling in your face "$129 value all for $19.99".  No text flying all over the screen.  And it's not depending on the SuperBowl for national acclaim.  It's already a product that simply speaks to people in a way that makes them want to spend a sizable amount of money on a phone.
• DuctTapeMarketing Blog: This blog on marketing is no secret and has enjoyed quite a bit of popularity.  The author, John Jantsch, gives a lot of great ideas, stories, and lessons to small businesses that need to not only get out the word, but get it out in the right way.  His post entitled, How Long Should it Take For My Marketing to Work?, is a great start.  Simply put, it takes time.
• UserDriven:  The blog's subtitle says it all, "Developing Products and Services from the Outside In".  The blog is written by a product manager at ATG, a software company.  The insights are valid for hard products and software alike.  I found this post, How Many User Tests Should You Run, to be particularly interesting.

Finally, one last quote, which you very well may have heard before, but I enjoy every time I hear it.  A little marketing inspiration, if you will...  This was posted on PragmaticMarketing.com's blog, in Are You a Gazelle or a Lion?:

Every morning in Africa, a gazelle wakes up and knows it must run faster than the fastest lion or it will be killed. Every morning in Africa, a lion wakes up and knows it must outrun the slowest gazelle or it will starve. It doesn't matter whether you are a lion or a gazelle; when the sun comes up, you better start running. --An African proverb

Retail Sell-Through Tips for Small Businesses

Most inventors and small businesses I talk to about their products have goals of selling through Walmart, Target, Walgreens, Home Depot, and the other major retailers out there.  "If I could just get my product into Walmart, then..."  Maybe.  It can be a tough road onto the shelves of these stores and I rarely find information out on the web that offer some explanation or tips. 

Alas, during one of the many Google searches I did throughout yesterday, I stumbled upon an errant result (or perhaps the blogging gods knew this article needed to have a blog post on it).  Startupnation, a resource website for entrepreneurs and small businesses posted:  Savvy Sell-Through Tips to Keep Customers Coming Back for More--Part's One and Two.  This is an informational article for those small businesses, start-ups, and inventors looking to take their retail channel to the next level and get their products some shelf space in a major retailer.  Those new to this game often believe the key to their problems is having the best product in the world.  If only... 

There is a lot more that goes into getting a product on the shelf in these big box gatekeepers to America's wallets, let alone successfully selling through them.  See my last post on Thomas Edison--prolific inventor AND marketer.

The article's main points in bullets, with my comments beneath:

• Repeat after Us:  Positioning, positioning, positioning...

Indeed.  Where is your product going to be in the store?  Endcap?  Aisle?  What category?  What product's will it be next to?  Does your packaging pop in comparison to your competitor's products?  These are things you can start considering early on if sell-through in major retailers is a key business move.

• Give retailers a sell-through tool kit

Last time I went shopping at Best Buy, I counted 39 "I don't know's" and 17 blank stares with head scratching in response to my questions about products.  Ok, not really.  But, it feels that way almost every time I go into stores like that, unless I stumble upon the superstar, diamond in the Western Region of stores, employee.  Give these folks the ammo to sell your product and explain why it's cool and the benefits of buying it.

• Show why your product is better than the other guys

Packaging and pricing are two ways the article points out to accomplish this.  I very much like the first one because you have so much control over it and you can see what your competitor's product packaging is like beforehand and design your packaging to triumph.  The second strategy, price, is ok.  But, be careful with this one.  It should be wielded only with good data analysis to support it and it's important to remember that once you go low, it is very hard to climb back up.  Limited time promotions can be a way to achieve this, but you'll pay a premium for this.

Their bottom line:

You have to do a lot more than just fulfill your retailers’ orders – you have to help them sell your products through to consumers. If you come up with good ideas to place and support them, retailers can be persuaded to go along.

Part Two:

• Get all exclusive with your major retailers

Yup.  Exclusivity is a negotiation point, right along with almost everything else.  Sometimes this works.

• Mix it up--extend your product line

Another good strategy.  Don't do it blindly.  Brainstorm all the different products you could develop.  Draw a roadmap according to which ones makes sense to develop when, targeted to who, etc.  Think strategically about which products to develop when and how, in order to maximize the entire product line.  The key is to maximize the return of your portfolio of products, not have each one developed in silos.

• Spread your product's backstory

Packaging.  With about half or more of purchasing decisions made right there in the aisle, you want to give all you've got to help people make the right decision.

• No ad budget--go to grass roots

I like this one.  It forces people to think and act creatively rather than just try and throw money at problems.  It certainly helps and can be a negotiating point if you are rolling out a nationwide marketing and PR campaign to sell your product.  But not everyone has this option, and these days, creativity, buzz, viral ideas, and word-of-mouth, are more potent and easy to create than ever.

Part Two's Bottom Line:

Landing those first retail deals is only the start. From then on, it takes innovation, imagination and work to get the sell-through that keeps your retail partners coming back for more – while you watch your company grow.

Check out the article. 

Market Your Product Online, Offline, Both: The Sky is the Limit

1) How long does it take you to get to your nearest consumer electronic store? 

2) How hard is it to find the exact product you want in a specific section of Best Buy or Comp USA (and how painful is it finding and talking to the help there sometimes)? 

3) And do you ever wonder if there could be a higher-quality product at another store for a better price just down the road?

My answers: 10 minutes.  Hard (and similar to sewing my eyes open and feeding me sleeping pills).  All the time.

As consumers, we don't like spending time, enduring pain, or wondering if the grass is greener with another product out there.

Welcome the emergence of the hybrid online/offline consumer experience.  A recent study completed by Yahoo on 2,000 U.S. adults, focusing on 5 consumer electronic categories, revealed that while 2/3 of shoppers still make purchases in physical retail locations, 2/3 of the consumers will use online and offline methods to research products before they go to the store to buy. 

"The Internet is far more than just another point of purchase; its biggest impact lies within the awareness and consideration process," said Wenda Harris Millard, Yahoo!'s chief sales officer. "The widespread adoption of social technologies gives marketers an even greater opportunity to continuously engage consumers and make connections across traditional and new media advertising, helping to build brand mindshare and increase offline sales."

Not surprisingly, according to the LA Times, internet ad sales soared 35% in 2006 to $16.9 billion in the U.S.  We're seeing businesses like NearbyNow, which allows consumers to locate items, availability information, and put holds on products for in-store purchase, spring up and streamline the online/offline experience.

Savvy product marketers, and marketers in general, are using the online/offline experience to drive impressive consumer awareness and sales campaigns, for FREE.

Integrating product marketing mixes can allow any company profound online/offline marketing tactic opportunities to get their message across effectively.  This story by Marketing Sherpa highlights how one non-profit organization was able to get its video message viewed by 59% of its target audience by sending out an announcement through the postal mail to the audience 2 1/2 weeks before sending that audience an email which opened up to a video message.  That creative little stunt earned the non-profit $1.9 billion in free advertising last year.

With the internet changing the nature of the game and leveling the playing field, smaller companies have more opportunities than ever, to capitalize on creativity, technological savvy, and integration to market and sell their products.

 

Product Design Party

Do you and your product development team find yourself staring at walls or ceilings, tapping pens on the table, jotting down notes and crossing them out repeatedly when brainstorming and prioritizing what features your product might include?  My conversations with clients regarding the features they want to include in their product design are usually more problem-themed than celebration-themed.  Creating the right mix of the most important, relevant, cost effective, user friendly features is a very difficult balance to strike.  Sometimes, just developing a number of possible features in the first place can be daunting.  Check out Creating Passionate Users blog posting on throwing a product/feature design party.  Here are the party-planning steps:

The basic idea looks like this, although there are a million ways to modify it:

1) Pick 9 people, ideally from different parts of your company and including some customers. (If you don't have a company yet, pick 9 friends--preferably those who don't know each other well)

2) Buy/borrow/find at least 20 "input materials" including books, magazines, a short film, graphic novels, etc. (a list of possibilities is a little lower in this post)

3) Assign (randomly) at least 2 "inputs" to each person. Do NOT let them choose (it's important they not be allowed to gravitate toward things they're already comfortable with)

4) Give the group 30 minutes to generate 4 ideas (if it's a feature/upgrade party, then 4 different features or feature sets... if it's a feature implementation party, then 4 different ways to implement the already-decided feature, etc.) These 4 ideas don't have to come directly from their input materials, although participants should be highly encouraged to describe at least one new thing they learned that inspired their idea.

5) Round One begins: split into 3 groups of 3 people (see chart below). Each person gets no more than 10 minutes to "pitch" four ideas to the other two in their group. There are 12 total ideas for this group, so allow about 30 minutes. Record (anonymously) the selections of each person, which represent a "vote" for the ideas.

6) At the end of Round One, each person must select their two favorite ideas from each of the other two members of their group. So if Group One had Fred, Mary, and Sue... then Fred must select his two favorite ideas from the four that Mary pitched, and his two favorites that Sue pitched.

7) Round Two begins: reconfigure the groups so that each person is now with different people (see chart below). Instead of pitching their own four ideas, each person pitches the four ideas they chose from their previous group members. Again, they have about 10 minutes to pitch the four ideas. Remember, the point is that each person is no longer pitching their own ideas!

8) At the end of Round Two, each person must again select their two favorite ideas from each of the other two members of this new group. Record (anonymously) the selections of each person, which represent a "vote" for the ideas.

9) Round Three begins: reconfigure the groups again. Each person in the group now pitches the four ideas (two from each of the two members of their most recent group) they chose in the previous (Round Two) round.

10) At this point, each person has pitched a total of 12 ideas:
* Round One: pitch your own four ideas
* Round Two: pitch four ideas from your Round One group to your new Round Two group -- two ideas from each of your previous group's other members.
* Round Three: pitch four ideas from your Round Two group to your new Round Three group, as before.

11) At the end of Round Three, again each person selects their top two favorite ideas from the ones pitched by the other two members. Record these as a vote.

12) You should now have a total of 108 votes. Choose the top 9 vote-getters (you'll have to be creative about tie-breaking... you could choose more than 9, for example).

13) Give each person a copy of the 9 ideas, and send them back for another round of "inputs." Again, assign each person different materials from the ones they used at the beginning.

14) Give the participants 30 minutes to use their inputs and flesh out a single idea from the nine. Their one idea can be a modified version of one of the nine, based on their "research." Their one idea could be a mashup of two or more of the nine ideas. It cannot, however, be something completely new. Participants should be prepared to explain how something they got from their inputs helped in some way (not an absolute requirement).

15) Now it's up to you what to do with the ideas. You might choose just one, or take all 9 "winners" with their pitches back to another person or group, etc.

What about intellectual property?  That might be a concern if not all 9 people are within your company.  But it shouldn't stop you dead in your tracks.  Would all 9 people be willing to sign NDAs?  Are they trusted friends that have no interest in the ideas that come out of it?  Could you limit the idea session to only one aspect, feature, or problem regarding your product?  Chances are, you have far more to gain than lose in this process.

 

Product Marketing: No Product That Has to do With Life is Boring

• Use people to sell to people
• Perception is reality, so use scripted professionals
• Tell a memorable story
• Create an emotional experience
• Create a believable, relevant personality
• Deliver a critical, hot-button moment

I don't care if you have invented the new dust collector, wall plug, or lug nut.  There is a connection between that product and humans.  There is a story you can tell about your product.  You can probably tell it through a multimedia channel.   If kleenex can do it, so can you.

Marketing Your Product on an Increasingly Cramped Retail Shelf: Your Biggest Challenge and Your Best Friend

Imagine you are walking down this aisle looking for one particular answer to your need, in the form of one product.  What words come to mind?  The words that come to my mind are: "cluttered", "overwhelming", "confusing", and "lost".  Coincidentally, these are the same words that come to mind when I look at my taxes, the freeway system in Los Angeles, and my hair in the morning.

Your product, which you have invested thousands, tens of thousands, or perhaps hundreds of thousands of dollars into, not to mention your blood, sweat, tears, 2nd mortgage, and kid's college education, might end up on the shelf in a situation like this. 

Here's some developments in the retail world in the last decade to chew on.  The number of SKU's ("Stock Keeping Units", or simply put--"products") out there has increased tremendously.  This is partly because the increase in private label offerings by major retailers.  But, it is also because companies are trying to refine their product offerings to appeal more to specific market segments.  Shoppers, consumers in general, are demanding more specific offerings that meet their specific needs.  One national retailer shelves more than twenty different models of kitchen mixers.  A national home improvement retailer offers 318 different refrigerator models.  A national electronics retailers sells 164 digital camera models.  You get the picture. 

What does this mean for someone browsing the shelves where your product is placed?  It means that it has become more difficult to evaluate and compare product features and purchasing paralysis is more common.  To make matters more challenging, your product has got to sell well in the first few weeks it's on the shelves of a national retailer, or they are going to be compelled to replace it with something else that might.  Is the word "overwhelming" creeping back into your mind again?

Don't let it.  Here are some things to consider that can help you beat out your competitors who are throwing in the towel or are too risk-averse to try something beyond the same old formula.  As you may remember from a few blog posts ago, in which I posted an interview with Barbara Carey, packaging is essential to get your product's perceived value as high as possible.  Also, if you read this post about Joshua Bell and the importance of context in communicating value, you have got to smack people in the face (not literally) and provide the message that your product is great through context.

• Product Packaging:  Your packaging must provide a positive emotional experience.  This is a very large component of the purchasing experience.  A nationally acclaimed study presented at the 2001 Radiological Society of North America national meeting, by Dr. Dean Shibata, demonstrated that when images were taken of subjects brains as they made purchasing decisions, the frontal lobes of the brain always demonstrated high activity, which was indicative of a substantial degree of emotional processing.  How can you make your packaging provide an emotionally positive experience?  Make it easy to understand what your product does and the pain it relieves your customer of--at the most basic level.  Don't clutter your packaging with a description of every feature and description you can conceive of.  Your product might make someone's teeth whiter AND provide greater fuel efficiency for their car, but which one is the reason why your specific target market is going to buy your product?  Remember, they are already overwhelmed.  They are seeking an easy choice and buying experience.  You might not get every single customer that walks through that section, but you will surely get the one with the pain point that is looking for the specific relief that your packaging is screaming out.

• Marketing Strategy:  I simply have to refer to the post on Seth Godin's presentation in my previous post.  In fact, that provided a good deal of the inspiration for this post.  Customers feel good when they feel engaged.  They feel they have been reached in a personal manner by someone offering them something that meets their specific need.  You can help accomplish this before your customer even walks into the store.  Your website, your message, your mission, your brochures, your blog, your press releases, your trade show presence, and more, can all be geared towards getting close to the customer and letting them know that you aren't a huge, faceless corporation throwing a product at them.  You are a company made up of people that understand their specific needs and have come to their rescue with an amazing product that will help them feel that they need to make a special trip to their nearest retail outlet where it is sold, pick it off the shelf, and walk straight to the counter without even considering anything else.  Or, better yet, make a purchase directly from you off of your website.

The increasing complexity of the retailing experience is challenging companies big and tiny.  Your advantage, lies in the fact that you can push the above strategies to the next level much more quickly, easily, and authentically, than the big guys.  That retail aisle up above could be your ticket to your customer's favor.  Have at it...

A New Paradigm for the Design, Innovation, Marketing, and Business Model for Your Product

This is a video of a groundbreaking presentation by Seth Godin that will push how you think about your product's development through marketing, design, production, and delivery further than it has gone in years.  Once you begin to let Godin's ideas about these issues start to permeate your skull, there's no turning back.  You are on your way towards something other than mediocrity.  When trying to develop a new product and get it on the market, mediocrity could be your worst enemy.  You might have a product for the masses--but your approach to alerting them to it and delivering it to them will likely need to be anything but average, run-of-the-mill, mediocre.  You need Seth Godin's ideas on your side.  Enjoy.

What Does a $3.5 Million Violin Have to do With Product Packaging?

It's amazing what context does for our judgments of the value of something.  As humans, we like to process information by placing it into categories.  This helps us to make order of the world and is often one of the fundamental factors behind our occasionally amazing ability to make great snap decisions, as well as our habit of falling victim to stereotypes and judging books by their covers, so to speak.   

This phenomenon plays out everyday and is nothing new, except when drastic situations illuminate the power of it in our daily lives.  The Washington Post did a fascinating experiment, in which a world-class violinist named Joshua Bell performed as a street musician in a Washington DC metro station.  Bell played  his $3.5 million violin, built in 1713, for 43 minutes in the morning during rush hour, as 1,097 people passed by.  As you can see in the video, no one really took notice, and he only made approximately $30.  Perhaps all of these people had more important things to do, and were running off to spend our tax dollars instead of listening to beautiful music.  Or, maybe without the concert hall, tuxedo, and fanfare, we rarely know something is great unless all the packaging is there to affirm it.

This reminds me of my recent conversation with Barbara Carey in which she discussed pricing a product based upon it's perceived value, and the importance of packaging in raising the awareness of that perceived value of your product.  We've all seen it out there--products which seem to be the exact same as their cheaper, generic counterparts, but are packaged in much more attractive packaging and sell for a 30%-50%, or more, mark-up.  Perhaps I could dress in a tuxedo and play Stairway to Heaven on my guitar in a concert hall that charges $200 a head?  Who's with me?

I believe brands are built on solid product (hence me abandoning my aforementioned "Stairway" plan).  But at the point of purchase, people probably won't think your product is great, unless your packaging provides the tuxedo, concert hall, and fanfare that your target market is looking for.  Think about the stores you shop in, that skin cream you bought, or any number of sports cars on the market which possess the same engines as your family sedan.  All are geared to indicate to you the value that the company selling the item wants you to believe you are getting--to give you an experience by creating the context.  Whether a given company or product delivers on that, that is another story.

Major companies test their packaging routinely, and often find that sales increase substantially when they hit upon the right combination for their target market.  You can't just put lipstick on the pig, and put poor, low end products in high end packaging.  This will only erode your customers' confidence.  But, if you're product is geared to provide something great in value to a particular market, you need to provide all the context that will turn their heads and get them to focus in on what is truly amazing about your product. 

Interview With Barbara Carey, Part III: Working with Buyers, Team Members, and Other Third Parties

Without further ado, here is the third and final part of my interview with Barbara Carey.  Again, you can learn more about her by visiting her blog or checking out the launch of her new program: The Carey Formula.

Part III
Working with Buyers, Team Members, and Other Third Parties

A:  So when you needed to find out whether stretch velveteen was good enough, did you find that out by putting it in front of people?

B: Yup.  When I have a question, I ask.  I survey.  You’ll want to ask your end user, customer, retailer, lots of people in different categories.  I mass market, so I need to appeal to the masses.  For these reasons, I always try and develop a relationship with the buyer I’m working with.  I typically close my deal with my buyer before I even go see them for the first time.  When I go see them, I usually feel I’m there as a courtesy call to pick up paper.  I do it that way because I believe in being a person that does what they say they’re going to do.  I pick up the phone.  I tell the buyer what I’m going to do and get off the phone very quickly.  A month later, I follow up with them and say “remember what I said I was going to do?  I just did it.”  And then I do it again and again.  And pretty soon, over a period of the product development process, which might be 6 or 8 months, I’ve become a person who does what I say I’m going to do.  And, the buyer has seen this whole series of accomplishments with you and they want to do business with you. 

A:  What about bringing in people to help you during this process?  Can you talk about how you surround yourself with people that can do certain things better than you?

B:  I surround myself with people that can do things I can’t.  I’ve got an excellent CFO.  I’ve got an excellent Operations Manager.  Basically, we are a sales and marketing office, a great designer, and a wonderful marketing coordinator.  We farm out everything else as a virtual company.  I don’t need to be in the warehousing industry or the manufacturing industry, so we have contract warehousing and manufacturing companies.  So throughout my life, I’ve been on this hunt to find great resources, and that’s what my CD library is all about.  It’s a collection of all these people and pieces that you need to make this whole thing work and keep very low overhead.

A:  That’s one of the messages that came strongly out of your book: keep costs low.  A lot of people go out and spend a lot of money on things that aren’t necessary when they’re starting a business…

B:  Business cards.  What a waste of money!  And, what a wonderful opportunity to get someone to email you instead.  Now you have this relationship of communication going back and forth.  Information can be the same way.  That’s the whole thing behind the book and web presence that I’m launching:  Access to information at an affordable price.  And it’s not just the book—it’s a whole business binder including how to price your product, cash flow and inventory management, and more—like the NOLO Press on how to start your business. 

A:  Turning to the subject of manufacturing overseas, what are some of the lessons you’ve learned along the way in this area.

B:  One, I, personally, don’t need to go overseas.  Two, use a third party quality control inspector.  Three, analyze how your communication process is going with your overseas supplier.  If they’re not responsive or don’t seem to put in much effort, that can be a big problem.  But they can do amazing things overseas.  I can get a book printed over there and sent here, even with the added shipping time, faster than I can get it printed and sent to me with a company here in the US.  A US manufacturer will make a book for me in 6 weeks.  A Chinese manufacturer can do it in 4 days. 

Also, you need to check references and do your due diligence.  If there are red flags, chances are they’ll become problems later.  Usually, where there is smoke, there’s fire. 

A:  What about dealing with problems that come up?

B:  Problems always come up in every area of the business.  I’m a problem solver.  That’s my job and I’m good at it.  You need to be a problem solver in business.  You need to maintain your professional composure.  I work with my vendors.  I’m not going to tear them apart when they make a mistake, because in the end they’ll love to work with my company.  I can be challenging, but I treat them fairly.  But you have to know that there isn’t anything you can’t solve or overcome.  Problems seem much smaller when you live that way. 

When I was building my Hairagami business, I had a vendor that didn’t do the things they said they were going to do.  And I had an order I needed to fulfill.  I was dumb in the first place to leave myself at their mercy.  You need to have a second source.  The order was supposed to ship and I hadn’t even seen a production sample for approval yet.  But, I didn’t freak out.  I went back to my buyer and told him that I had a challenge and I wanted to see if he could work with me.  I’m willing to compromise to figure these things out.  And that buyer was wonderful and so polite in helping me figure the situation out.  Part of his motivation for being that way was that he respected me because he already knew me as a person that does what I say I’m going to do. 

Interview With Barbara Carey, Part II: Pricing Your Product

Here is Part 2 of 3 from my interview with Barbara Carey.  There is some very insightful info about pricing and testing your product on the market.  Enjoy.

Part II
Pricing Your Product

A:  Touching on the point of selling your product before you manufacture it, I have worked with several people that have taken orders from customers but were not aware of the time it was going to take to develop and manufacture the product, and they realized they promised on something they couldn’t deliver. 

B:  Hey, the article you wrote for our newsletter on obtaining manufacturing quotes and schedules is an excellent remedy for that.  Reference it here (Thanks Barbara, I will: Obtaining Cost Estimates From Manufacturers).

And in thinking about manufacturing, getting quotes, and setting your price points, it all starts with the perceived value of your product.  You want to get that up as high as possible and you use your packaging to help with that.  You have a product.  It delivers a promise.  What is that promise’s value?  In terms of Hairagami, it was great because it wasn’t a hair clip that you look at and think “this is a piece of plastic made for a dollar and then some”.  Hairagami makes a new hair style which saved you a trip to the hair salon.  That’s worth fifty dollars.  So then, when I can sell it at $14.95, it doesn’t just save you fifty dollars once, but each time you might go to the salon.  And, it saves you time because you don’t have to go to the salon.  It saves you time and money!  So, start with your perceived value of your product and your packaging should convey all those key messages that bring your perceived value up.  Talk to a few manufacturers or experts to get some cost feedback for your analysis.  Then, do a marketing survey to see if your target customers would buy at this price or that price.  And, ask the likelihood that they would buy it?  I ask these questions many different ways until I hit what I think might fit with the key price points.  Retail has price points $14.99, $7.99, $9.99, etc.  You don’t price your product at $16.75.  You have to think about where your product fits into one of these categories where a potential customer will see that at that price, the perceived value is much higher and the ‘cup runneth over’.  Rich Jr.’s item was very inexpensive to make, approximately $2.  I don’t remember exactly.  He sold it for approximately $6.50, and there was a nice sized margin in between.  Size matters!  And we thought, “gee, we sell it at $6.25, they could price it at $12.50.  But the retail price point that’s going to move a lot is at the under-$10 threshold, or $9.95.  So we tried a couple of different price points at retail and the $9.95 point sold three times as much, just because of that little change below $10.

A:  When you test different price points, how do you make sure you aren’t cannibalizing sales of your product in another channel? 

B:  You guard against that by doing a small test with somebody who might be in a different channel.  You might keep your main channel at the optimal price point, but you might experiment a little at a specialty retail store or a resort.  You can try different price points that way and still protect your channels.

A:  So you’re always testing, surveying, etc.?

B: Even when your product is more mature in it’s life cycle, you still are going to want to test your price points.

A:  How do you deal with deciding whether to go with your perfect vision of the best product you can possibly design or to go with something that is just good enough to sell at your chosen price point?  Many inventors fall in love with their products and develop the most amazing, high-quality item they can conceive of.  Then, they go get manufacturing quotes and realize that they are way out of the ballpark when it comes to making their margins.   

B:  That’s not good…

A:  Right, so how do you make sure you don’t run into that problem?

B:  That’s why you need to start with the perceived value and then you need to make a product that you can make a big margin with and give the retailer a margin they can make money on.  You have to ask what price the end user will buy it for.  Ask the retailer what price they need to buy it for to make money.  And, find a price you can have it made for so that you can make money.  That’s why I look for products that have a high-perceived value and are relatively low in cost. 

A:  So when you thought of Hairagami and had to decide what kind of fabric to use, how did you decide what would be cost effective and still deliver?

B:  I didn’t have the money to afford velvet to hit the margin that I needed.  So I used stretch velveteen and that was good enough and didn’t change my margin either.  Also, this was a product that I needed a large packaging insert to explain what the product could do.  But I didn’t have the retail shelf space to accomplish that.  So I created a package in which there was a pop-out map concept.  The paper unfolded, opened up, and gave a great display of “let me tell you about my product”.  So you have to think of creative ways to accomplish what you need cost-effectively.

Working with Independent Sales Reps

We get a lot of questions about finding and partnering with the right ISRs (independent sales reps).  George Krall, National Sales Manager for Regal Lager/Baby Bjorn, a distributor for the juvenile products industry, has written a great article on what's involved in a strong working relationship with an ISR (posted in Baby Shop Magazine).  You can quickly refresh yourself or learn about your responsibilities and those of the rep, and what are the most important elements in creating a successful sales team for your product.  It's not surprising that Mr. Krall finds that "the key factor in the success of a company/rep relationship is founded in the selection process".  Why would you ever entrust the sales of your product or the production of your product to people or companies that you haven't thoroughly investigated and believe to be the right provider of each? 

Launching Your Product: Go Big or Go Home

The Marketing Profs, a great website which puts out bite-sized tips on marketing your business, put out a good article reminding us not to let ourselves think the job is done when the product is on the boat and will soon be in customers' hands.  The article, Launching Your Product: Seven Marketing 'Musts', gives some great ideas and inspiration for the ever-critical marketing aspects of launching your product.  The steps are (my comments in parenthesis):

1) Secure a great name
2) Nail down the "what is it?" description (especially all you former NASA engineers out there)
3) Establish a strong visual identity
4) Insist on effective creative (codeword for: an attention-grabbing promotion strategy)
5) Promote in multiple channels
6) Tier your message
7) Collaborate from the get-go

Most articles out there focus on the marketing aspects of a new product launch.  That's because marketing is so hard to get right.  Between Engineering, Manufacturing, Marketing, Sales, Product Support, and Field Serivce, there's a lot to keep track of.  Most of these steps will occur before your product actually touches down in your market.  This is just a reminder to make sure you plan for marketing to lead up to GOING BIG when it will.

Web Resources for Product Launch

Squidoo?  It's a website that allows people to create a "lens", or aggregate web resources on a particular topic.  Websites that break down the web into more navigable, useful sources of information like this are becoming increasingly important in the ever-expanding internet.  Tatsuya Nakagawa, president and CEO of Atomica Creative, a product marketing firm, has put together this lens on product marketing.  It has quite a few helpful resources on this issue.